It has been told that 16 insurance companies have taken ITC of Rs 824 crore and so far these companies have voluntarily paid an amount of Rs 217 crore.
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The GST authority has uncovered a big fraud. Goods and Services Tax The authority has sanctioned Rs 824 crore by 16 insurance companies. input tax credit of alleged misuse is traced. According to the authority, these companies had used their middlemen to issue fake invoices. Directorate General of GST Intelligence It has been told that 16 insurance companies have invested Rs 824 crore. ITC and these companies have so far voluntarily paid an amount of Rs 217 crore.
The Mumbai zonal unit of DGGI had launched an investigation but the names of the firms have not been disclosed in the statement. According to the statement, these companies had availed ITC on the basis of invoices issued by several intermediaries for providing services such as advertising, marketing and brand activation. But these companies did not actually provide any such services, according to the statement. However, there is no provision for any such input tax credit in the GST laws.
Agent work for NBFCs doing insurance companies
According to the statement, several non-banking financial companies (NBFCs) engaged in micro-financing businesses are acting as corporate agents of insurance companies, and these companies are cross selling their single premium credit (linked) insurance policies. As per IRDA regulation, only nominal commission is allowed to a corporate agent. According to the statement, in order to circumvent these regulations, insurance companies resorted to obtaining invoices from intermediaries to supply services of advertising and web marketing, transfer commissions to NBFCs – but the services were never supplied. However, in return, these intermediaries received invoices from NBFCs for such supplies.